The South Korean government forcibly delayed the taxation of virtual assets, and representatives of opposition parties and other organizations criticized: undermining tax justice.

After the South Korean government and ruling party pushed for the abolition of the financial investment income tax (financial investment tax), they are now actively promoting the postponement of virtual asset taxation. The Democratic Party is considering increasing the tax exemption threshold from the current 2.5 million Korean won to 50 million Korean won, a 20-fold increase. However, the South Korean media pointed out that Representative Lee Jae-myung of the Democratic Party expressed concerns about virtual asset taxation in a closed-door meeting, causing the related discussions to once again fall into chaos. This situation may repeat the controversy over financial investment tax.

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Financial Justice Alliance: Irresponsible policies undermine tax justice and political trust

Representative Jin Deyi (phonetic translation) of the Financial Justice Alliance strongly criticized the government's tax deferral policy, calling it an 'irresponsible act that undermines tax justice and political trust'. He pointed out that the government's repeated decisions to defer taxes are undermining the fairness of the tax system.

Taxation disputes for small cryptocurrency holders

According to data from the Financial Services Commission of Korea, 72.8% of virtual asset users have assets less than 1 million Korean won (about 716 US dollars). Based on the current tax exemption threshold, the majority of people are no longer subject to taxation. Users with assets of more than 5 million Korean won account for only 15.4% of the total. If limited to the age group of 20 to 30, this proportion drops to less than 10%. Such statistical data has raised doubts about the effectiveness of the taxation policy.

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The third largest market in the world, but the tax system is still imperfect.

As of the first half of 2024, the number of virtual asset users in South Korea has reached 7.78 million, ranking third in the world behind the United States and Japan. Currently, the price of Bitcoin is approaching the $100,000 mark. Citizen groups criticize:

In such a large market, it is incredible that there is no complete tax system.

They strongly condemn the government's practice of repeatedly delaying taxation on the grounds of inadequate preparation of the tax system.

The delay has entered its third year, and the international community has long implemented a tax system.

The virtual asset tax in South Korea has been postponed to the third year. The larger markets such as the United States, Japan, as well as major countries such as the United Kingdom, Germany, and Australia have already implemented virtual asset tax systems. Faced with this international trend, South Korea's repeated delays have been criticized as lagging behind global standards.

Controversy over tax reduction for the wealthy caused by a tax-exempt amount of KRW 50 million

Democratic Party Policy Committee Chairman Chen Shengjun (phonetic) said that if the tax-free threshold is raised to 50 million Korean won, only 0.03% of users with assets exceeding 1 billion Korean won will be required to pay taxes. However, Kim Dae-yi, the representative of the Financial Justice Alliance, criticized: 'The proposal for a tax-free threshold of 50 million Korean won is not for the normal implementation of taxation, but as an excuse to raise the tax-free standard.' He believes that this seriously damages tax justice. He further pointed out: 'The National Power Party's proposal to delay taxation for the 0.03% is irresponsible, and the Democratic Party, which allows only 0.03% of people to pay taxes, is also deviating from tax justice.'

Call for strengthening the tax system to achieve tax justice

Criticism continues over the government and ruling party's policy of delaying the taxation of virtual assets. Experts and civic groups unanimously urge the swift establishment of a taxation system that conforms to market scale, achieving fair taxation and ending indefinite postponement.

This article South Korean government forcibly delays virtual asset taxation, opposition party representatives and other social groups criticize: undermining tax justice first appeared on Chain News ABMedia.